With over fifteen million users, Upwork is the most popular freelancing platform in the world. With so many skilled people in one place, business owners can choose from a wide talent pool even if they only have a small budget.
But how much does it really cost to find a freelancer for your project?
On their website, Upwork provides an overview of average rates that freelancers charge for their services rates. These vary depending on their skills and experience:
However, these are not the only expenses you’ll have to consider if you’re hiring someone from Upwork. As usual, there are additional processing and administration fees. In fact, each freelancing platform charges certain fees in order to make money.
In the last few years, Upwork has introduced larger fees for both freelancers and clients.
So, if you’re looking to find a freelancer on Upwork, you may not be aware of how much your project will cost. That’s why we’ve prepared this article – read on to find out exactly how much Upwork charges and how you can minimize the costs of your project.
Upwork Fees for Employers
Creating an account of Upwork is completely free. The fees come into the picture only once you find and hire a freelancer for your project.
There are two ways to pay freelancers:
- Fixed Price
A fixed price is a great choice for projects that have clear deliverables. Upwork also makes sure that both freelancers and clients are satisfied by holding money in an escrow before the finished product is approved.
If there is a problem, employers can ask for changes or a refund.
- Hourly Payment
Hourly payments are a great option for projects that don’t have clear deliverables. If your freelancer is doing market research or editing documents, you can opt for this type of payment. To make sure that your employee is actually working, you can track their work by using Upwork’s Work Diary time-tracking tool.
Whichever option you choose, you will have to pay a processing fee of 3% for every payment.
Although Upwork initially did not charge clients for transferring payments, in 2016 they introduced a processing fee of 2,75% (this was increased to 3% in 2019). This will be deducted from your account on top of the payment you send to your worker. For example, for a payment of $100, Upwork will charge an additional $3 processing fee, charging you $103 in total.
The processing fee is not charged to clients who pay for subscription models introduced in 2019. These come at a very high price starting at $49,99 per month.
Upwork Fees for Freelancers
Aside from charging clients a processing fee, Upwork charges freelancers a service fee. This is taken as a percentage of their earnings.
Before the changes made in 2016, Upwork charged freelancers a flat rate of 10% on every payment they received. However, the fees increased and today are charged as follows:
- 20% for the first $500 they bill a client
- 10% for total billings with a client between $500 and $10,000
- 5% for total billings with a client that exceed $10,000
Although this system may work for experienced freelancers who take on larger projects, it makes it more difficult for new freelancers to find opportunities and make money.
Why is this important to you as a business owner?
Although these fees are taken from your workers, this means that they no longer make the same amount of money as they did before these fees were introduced.
As a result, many freelancers raised their rates – which means you will have to pay more money to get the same results.
Obviously, the changes that Upwork introduced in recent years raised the fees for both clients and freelancers.
Let’s take a look at an example of a project with a budget of $1,000.
Before 2016, a payment of $1000 meant that your worker would receive $900, paying a 10% flat service fee. Today, a budget of $1000 means that you will actually have to pay $1030, with your freelancer receiving $850 if you’re working with them for the first time. This means that Upwork receives $180 in total!
If you constantly find workers on Upwork, these fees accumulate into a substantial amount – an amount that you could use to grow your business and even hire more workers.
That’s why many employers are looking for new platforms where they can find skilled workers at a lower cost.
Some of the other available options are:
- Fivver (charging 1$ for purchasing gigs up to $20 and $5 for every purchase above $20 + charging freelancers 20% of their earnings)
- We Work Remotely (charging employers a fee of $299 to keep a job post for 30 days)
- JobRack (charging employers a fee of $199 to keep a job post for 60 days)
With JobRack, there are no hidden fees or monthly subscriptions. In fact, a one-time 100% transparent fee is just one of the ways you can save money by hiring from our platform.
The best thing about JobRack is that we offer high-quality workers the top outsourcing destination – Eastern Europe. This means that you can find a skilled worker for a great value and save even more money. With suitable time zones, similar cultures, and one of the most skilled tech industries in the world, Eastern Europe is currently the best place to find remote workers.
We have thousands of talented professionals who are ready to make a difference for your business. Click here to find out more.